S&P cuts Shutterfly

S&P said it lowered its issuer rating for Photo Holdings LLC (Shutterfly) to SD, selective default, from CC and its senior secured debt to D from CC.

The downgrade follows Shutterfly completing its debt exchange, which included $200 million of new debt and the exchange of its previous term loan, senior secured notes and unsecured notes.

“We view the transaction as distressed because the exchange was completed at 90% of par value, the first-lien debt is now subordinated, and it shifted a portion of the interest to payment in kind (PIK),” S&P said in a press release.

The agency said it intends to reevaluate Shutterfly’s new capital structure and liquidity position in the near future.

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